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Are SPACs redirecting blank check love to self-driving truck startups?

TuSimple readies IPO as SPACs court autonomous developer Plus

As the special purpose acquisition companies’ (SPACs) love affair with electric vehicle startups cools, infatuation backed by blank check-writing investors may blossom for self-driving truck startups. (Photo: Plus)

As the special purpose acquisition companies’ (SPACs) love affair with electric vehicle startups cools, infatuation backed by blank check-writing investors may blossom for self-driving truck startups.

After several months of stock price run-ups in SPAC-sponsored electric vehicle and infrastructure companies, prices have fallen dramatically in recent weeks. In some cases, they are edging close to their original $10-per-share offering price.

One target in the shift from electrification appears to be well-capitalized self-driving truck startup Plus. It closed a $200 million funding round in February. 

Plus has raised $400 million since its 2016 founding. That’s enough money to continue developing its autonomous system in the near term. But Bloomberg reports Plus is talking with several SPACs that have between $300 million and $500 million to invest.

As the EV pool empties, attention shifts

The attention shifting to autonomous driving and mobility technologies such as vertical landing and takeoff (VTOL) aircraft suggests the pool is emptying of attractive electric vehicle startups. Two SPACs already sponsor VTOL startups whose products are years away.

In recent weeks, Xos Trucks, a California maker of electrified modular truck chassis, and Singapore commercial vehicle fuel cell electric spinoff Hyzon Motors have gone the SPAC route. Both business combinations expect to close in the second quarter. That is when they would get money held in trust by the shell companies created specifically to pick a merger target.

Another SPAC target could be Swedish remote-guided electric trucking pod maker Einride. The company is seeking $75 million in new financing while exploring SPAC sponsorship, TechCrunch reported Monday. 

Overall, the 233 SPACs started this year trail the 248 opened in all of 2020, according to SPAC Insider. The average investment per SPAC is $322.1 million compared to $336 million in 2020.

Plus is weeks away from a deal announcement, Bloomberg reported, citing people who asked not to be identified because the matter is private. Plus expects to set its valuation range later this month, one of the people told Bloomberg.

“We don’t comment on market rumors,” Shawn Kerrigan, Plus co-founder and chief operating officer, told FreightWaves. “Plus has built incredible business momentum. And we’re currently focused on the global commercial deployment of our autonomous driving system, PlusDrive, which starts mass production this year.”

TuSimple likely to go public first

The self-driving truck company expected to go public first is TuSimple. Major fleets and suppliers invested in TuSimple. Some make up an executive advisory committee that included VectoIQ. The mobility consultancy that brought electric truck startup Nikola Corp. (NASDAQ: NKLA) public via SPAC in 2020 co-led TuSimple’s most recent funding round.

VectoIQ started another SPAC in January. But it has not identified a target. Given its role with TuSimple, it would be an unlikely pursuer of Plus.

TuSimple filed a confidential S-1 prospectus with the U.S. Securities and Exchange Commission (SEC) in December. It is expected to make that filing public as soon as the week of March 22, according to knowledgeable people who asked not to be identified because the date could change.

A filing this month would allow pricing of shares in early April, followed by public sale as soon as a day later. TuSimple is seeking to value its business between $3.5 billion and $7 billion, China-based media site TechNode reported last August.

TuSimple operates a fleet of 50 Level 4 self-driving trucks hauling freight in the American Southwest. It also has trucks in test operations in China. Level 4 autonomy means the truck can perform most functions without human intervention. TuSimple trucks still have a safety driver and an engineer on board.

Self-driving truck pairings

Autonomous truck startup Aurora, led by veteran autonomous system developer Chris Urmson, has a partnership with PACCAR Inc. (NASDAQ: PCAR) The Peterbilt and Kenworth divisions will develop trucks with Aurora’s systems in the next few years. Aurora fitted a Peterbilt Model 579 with its self-driving software in July.

“I think Aurora is a really good company,” PACCAR CEO Preston Feight said on the company’s Jan. 26 earnings call. “We chose them because of our working relationship with them.”

The PACCAR financial investment is limited to research and development dollars. Mountain View, California-based Aurora is even buying the trucks.

Aurora’s finances got a boost when Uber (NYSE: UBER) invested $400 million in exchange for a 26% interest in the company. At the same time, Aurora acquired Uber’s Advanced Technology Group in a deal reportedly valued at about $4 billion. 

Navistar International Corp. (NYSE: NAV) and soon-to-be-parent TRATON Group (8TRA.S.DX)   invested in TuSimple and are developing Level 4 autonomous trucks. Navistar is targeting 2024 to sell a TuSimple-enabled truck for long-haul driving. TRATON is testing TuSimple software on Scania trucks in Sweden. 

Daimler Trucks acquired autonomous software maker Torc Robotics and works with Google’s Waymo unit. 

“Our equity ownership in Torc Robotics and the alliance we have with Waymo gives us a chance to partner with people who have the time, the energy and the focus to put into virtual driving systems that we can’t because we’re keeping our current customer base running,” Daimler Trucks North America CEO Roger Nielsen told FreightWaves.

Of the major truck makers operating in the U.S., only Volvo has yet to announce a driverless truck partner. Swedish parent Volvo Group developed Vera, an autonomous vehicle with no driver’s compartment, that can move goods by remote control.

Chinese investors join $200M funding round for autonomous startup Plus

Hyzon Motors to get $570M from SPAC backing fuel cell technology

PACCAR and Aurora to build autonomous trucks

Click for more FreightWaves articles by Alan Adler.

Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.